SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the period ended: March 31, 2003
NORTH FORK BANCORPORATION, INC.
| DELAWARE | 36-3154608 | |
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| (State or other Jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 275 BROADHOLLOW ROAD, MELVILLE, NEW YORK | 11747 | |
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| (Address of principal executive offices) | (Zip Code) |
(631) 844-1004
Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes (X) No ( )
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). (X) Yes ( ) No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| CLASS OF COMMON STOCK | NUMBER OF SHARES OUTSTANDING – 5/12/03 | |||
$.01 Par Value |
156,657,723 | |||
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
North Fork Bancorporation, Inc. and Subsidiaries
| 1) | Consolidated Balance Sheets | ||
| 2) | Consolidated Statements of Income | ||
| 3) | Consolidated Statements of Cash Flows | ||
| 4) | Consolidated Statements of Changes in Stockholders’ Equity | ||
| 5) | Consolidated Statements of Comprehensive Income | ||
| 6) | Condensed Notes to Consolidated Financial Statements |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| The information required by this item is contained throughout Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated by reference herein. |
ITEM 4. CONTROLS AND PROCEDURES
| Senior management maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods prescribed by the SEC, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, senior management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. | |||
| Senior management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13(a)-14(c) under the Securities Exchange Act of 1934, as amended) as of a date within 90 days prior to the filing date of this Report. Based upon that evaluation, senior management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective. Further, there were no significant changes made in our internal controls or in other factors that could significantly affect these internal controls subsequent to the date of the most recent evaluation performed by senior management, including the Chief Executive Officer and Chief Financial Officer. |
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
| Not Applicable. |
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
| Not Applicable. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
| Not Applicable. |
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
| Not Applicable. |
ITEM 5. OTHER INFORMATION
| Not Applicable. |
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
| (a) | The following exhibits are submitted herewith: |
| Exhibit # | Description | |
| (11) | Statement Re: Computation of Net Income Per Common and Common Equivalent Share | |
| (99.1) | Certification of CEO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| (99.2) | Certification of CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
2
| (b) | Current Reports on Form 8-K |
| We furnished or filed the following Current Reports on Form 8-K during the period from January 1, 2003 to the date of the filing of this Report: |
| 1. | Current Report on Form 8-K, dated January 28, 2003, which includes under Item 9, an announcement that we will be presenting at the Salomon Smith Barney Financial Services Conference in New York City on Wednesday, January 29, 2003. This report has been furnished but not filed pursuant to Regulation FD. | ||
| 2. | Current Report on Form 8-K, dated January 29, 2003, which includes under Item 5, an announcement that our Board of Directors approved an increase to our previously announced share repurchase program by 5 million shares bringing the total authorized for repurchase to approximately 6 million shares or 4% of our outstanding shares. | ||
| 3. | Current Report on Form 8-K, dated March 5, 2003, which includes under Item 9, an announcement that we will be presenting at the Keefe, Bruyette & Woods, Inc., Eastern Regional Bank Symposium in Boston on Thursday, March 6, 2003. This report has been furnished but not filed pursuant to Regulation FD. | ||
| 4. | Current Report on Form 8-K dated April 16, 2003, which includes information being filed pursuant to Item 12 but was filed under Item 9, an announcement of our operating results for the first quarter ended March 31, 2003. | ||
| 5. | Current Report on Form 8-K, dated April 23, 2003, which includes under Item 9, an announcement that we presented certain financial data and performance trends for the full year 2002 and the most recent quarter ended 2003 at our Annual Meeting of Stockholders on Tuesday, April 22, 2003. This report has been furnished but not filed pursuant to Regulation FD. |
3
Consolidated Balance Sheets (unaudited)
| March 31, | December 31, | March 31, | ||||||||||||||
| 2003 | 2002 | 2002 | ||||||||||||||
(in thousands, except per share amounts) |
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Assets: |
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Cash & Due from Banks |
$ | 376,355 | $ | 396,725 | $ | 299,915 | ||||||||||
Money Market Investments |
47,693 | 27,613 | 56,896 | |||||||||||||
Securities: |
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Available-for-Sale ($4,287,274 , $3,639,853 and $1,755,522 pledged at
period ends, respectively) |
9,509,222 | 8,555,892 | 4,926,156 | |||||||||||||
Held-to-Maturity ($113,647, $167,829 and $358,794 pledged at
period ends, respectively) |
252,364 | 307,878 | 602,509 | |||||||||||||
Total Securities |
9,761,586 | 8,863,770 | 5,528,665 | |||||||||||||
Loans, Net of Unearned Income |
11,435,423 | 11,369,139 | 10,583,097 | |||||||||||||
Less: Allowance for Loan Losses |
115,087 | 114,995 | 106,352 | |||||||||||||
Net Loans |
11,320,336 | 11,254,144 | 10,476,745 | |||||||||||||
Goodwill |
410,495 | 407,132 | 406,947 | |||||||||||||
Identifiable Intangibles |
15,440 | 16,332 | 19,188 | |||||||||||||
Premises & Equipment |
140,517 | 132,529 | 111,050 | |||||||||||||
Accrued Income Receivable |
107,549 | 104,719 | 94,011 | |||||||||||||
Other Assets |
211,929 | 210,137 | 163,160 | |||||||||||||
Total Assets |
$ | 22,391,900 | $ | 21,413,101 | $ | 17,156,577 | ||||||||||
Liabilities and Stockholders’ Equity: |
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Demand Deposits |
$ | 3,359,885 | $ | 3,417,534 | $ | 2,714,795 | ||||||||||
Savings Deposits |
3,532,326 | 3,440,573 | 3,248,736 | |||||||||||||
NOW & Money Market Deposits |
3,376,108 | 3,347,385 | 2,406,424 | |||||||||||||
Time Deposits |
1,932,743 | 1,949,559 | 2,231,291 | |||||||||||||
Certificates of Deposit, $100,000 & Over |
1,171,386 | 1,037,479 | 1,012,848 | |||||||||||||
Total Deposits |
13,372,448 | 13,192,530 | 11,614,094 | |||||||||||||
Federal Funds Purchased & Securities Sold Under
Agreements to Repurchase |
4,527,000 | 3,851,000 | 1,804,300 | |||||||||||||
Federal Home Loan Bank Advances |
1,550,000 | 1,550,000 | 1,550,000 | |||||||||||||
Subordinated Debt |
499,162 | 499,140 | — | |||||||||||||
Capital Securities |
268,939 | 268,926 | 244,370 | |||||||||||||
Due To Brokers |
178,076 | 105,227 | 23,359 | |||||||||||||
Accrued Expenses & Other Liabilities |
464,188 | 432,225 | 420,248 | |||||||||||||
Total Liabilities |
$ | 20,859,813 | $ | 19,899,048 | $ | 15,656,371 | ||||||||||
Stockholders’ Equity: |
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Preferred Stock, par value $1.00; authorized 10,000,000 shares, unissued |
$ | — | $ | — | $ | — | ||||||||||
Common stock, par value $0.01; authorized 500,000,000 shares;
issued 174,580,778 shares at March 31, 2003 |
1,746 | 1,746 | 1,746 | |||||||||||||
Additional Paid in Capital |
375,513 | 377,311 | 370,006 | |||||||||||||
Retained Earnings |
1,651,882 | 1,590,594 | 1,396,387 | |||||||||||||
Accumulated Other Comprehensive Income |
30,916 | 17,991 | 4,401 | |||||||||||||
Deferred Compensation |
(68,307 | ) | (70,562 | ) | (56,343 | ) | ||||||||||
Treasury Stock at cost; 17,504,534 shares at March 31, 2003 |
(459,663 | ) | (403,027 | ) | (215,991 | ) | ||||||||||
Total Stockholders’ Equity |
1,532,087 | 1,514,053 | 1,500,206 | |||||||||||||
Total Liabilities and Stockholders’ Equity |
$ | 22,391,900 | $ | 21,413,101 | $ | 17,156,577 | ||||||||||
See Accompanying Notes to Consolidated Financial Statements
4
Consolidated Statements of Income (Unaudited)
| Three Months Ended | |||||||||||
| March 31, | March 31, | ||||||||||
| 2003 | 2002 | ||||||||||
(in thousands, except per share amounts) |
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Interest Income: |
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Loans |
$ | 196,921 | $ | 194,671 | |||||||
Mortgage-Backed Securities |
82,228 | 79,163 | |||||||||
Other Securities |
13,444 | 9,076 | |||||||||
State & Municipal Obligations |
3,789 | 2,661 | |||||||||
Money Market Investments |
174 | 228 | |||||||||
Total Interest Income |
296,556 | 285,799 | |||||||||
Interest Expense: |
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Savings, NOW & Money Market Deposits |
14,760 | 14,616 | |||||||||
Time Deposits |
10,053 | 19,395 | |||||||||
Certificates of Deposit, $100,000 & Over |
5,103 | 7,888 | |||||||||
Federal Funds Purchased & Securities Sold Under Agreements to Repurchase |
28,658 | 20,255 | |||||||||
Federal Home Loan Bank Advances |
18,957 | 19,648 | |||||||||
Subordinated Debt |
7,225 | — | |||||||||
Capital Securities |
2,350 | 5,140 | |||||||||
Total Interest Expense |
87,106 | 86,942 | |||||||||
Net Interest Income |
209,450 | 198,857 | |||||||||
Provision for Loan Losses |
6,250 | 6,250 | |||||||||
Net Interest Income after Provision for Loan Losses |
203,200 | 192,607 | |||||||||
Non-Interest Income: |
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Customer Related Fees & Service Charges |
20,166 | 18,386 | |||||||||
Investment Management, Commissions & Trust Fees |
3,124 | 4,750 | |||||||||
Mortgage Banking Operations |
2,818 | 1,268 | |||||||||
Check Cashing Fees |
996 | 763 | |||||||||
Other Operating Income |
4,546 | 2,506 | |||||||||
Securities Gains, Net |
2,597 | 1,028 | |||||||||
Total Non-Interest Income |
34,247 | 28,701 | |||||||||
Non-Interest Expense: |
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Employee Compensation & Benefits |
47,340 | 40,665 | |||||||||
Occupancy & Equipment, Net |
15,521 | 12,912 | |||||||||
Other Operating Expenses |
16,817 | 16,703 | |||||||||
Amortization of Identifiable Intangibles |
892 | 952 | |||||||||
Total Non-Interest Expense |
80,570 | 71,232 | |||||||||
Income Before Income Taxes |
156,877 | 150,076 | |||||||||
Provision for Income Taxes |
53,338 | 51,776 | |||||||||
Net Income |
$ | 103,539 | $ | 98,300 | |||||||
Earnings Per Share — Basic |
$ | 0.67 | $ | 0.61 | |||||||
Earnings Per Share — Diluted |
0.67 | 0.61 | |||||||||
Cash Dividends |
0.27 | 0.24 | |||||||||
See Accompanying Notes to Consolidated Financial Statements
5
Consolidated Statements of Cash Flows (unaudited)
| For the Three Months Ended March 31, | 2003 | 2002 | ||||||||
(in thousands) |
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Cash Flows from Operating Activities: |
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Net Income |
$ | 103,539 | $ | 98,300 | ||||||
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities: |
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Provision for Loan Losses |
6,250 | 6,250 | ||||||||
Depreciation |
3,644 | 3,250 | ||||||||
Amortization |
2,916 | 2,331 | ||||||||
Amortization of Identifiable Intangibles |
892 | 952 | ||||||||
Amortization of Securities Premiums |
23,136 | 5,049 | ||||||||
Accretion of Discounts and Net Deferred Loan Fees |
(9,811 | ) | (14,276 | ) | ||||||
Securities Gains, Net |
(2,597 | ) | (1,028 | ) | ||||||
Other, Net |
(83,223 | ) | (89,800 | ) | ||||||
Net Cash Provided by Operating Activities |
44,746 | 11,028 | ||||||||
Cash Flows from Investing Activities: |
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Purchases of Securities Held-to-Maturity |
(14,280 | ) | — | |||||||
Maturities, Redemptions, Calls and Principal Repayments on
Securities Held-to-Maturity |
69,408 | 107,158 | ||||||||
Purchases of Securities Available-for-Sale |
(2,447,545 | ) | (615,713 | ) | ||||||
Proceeds from Sales of Securities Available-for-Sale |
71,035 | 39,055 | ||||||||
Maturities, Redemptions, Calls and Principal Repayments on
Securities Available-for-Sale |
1,600,566 | 712,625 | ||||||||
Loans Originated, Net of Principal Repayments and Charge-offs |
(188,482 | ) | (247,143 | ) | ||||||
Proceeds from the Sale of Loans |
121,683 | 62,700 | ||||||||
Transfers to Other Real Estate, Net of Sales |
— | (15 | ) | |||||||
Purchases of Premises and Equipment, Net |
(11,633 | ) | (3,520 | ) | ||||||
Net Cash (Used in)/Provided by Investing Activities |
(799,248 | ) | 55,147 | |||||||
Cash Flows from Financing Activities: |
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Net Increase in Customer Deposit Liabilities |
179,918 | 310,788 | ||||||||
Net Increase/(Decrease) in Federal Funds Purchased &
Securities Sold Under Agreements to Repurchase |
676,000 | (337,882 | ) | |||||||
Purchase of Treasury Stock |
(61,731 | ) | — | |||||||
Exercise of Options and Common Stock Sold for Cash |
2,731 | 6,050 | ||||||||
Cash Dividends Paid |
(42,706 | ) | (39,254 | ) | ||||||
Net Cash Provided by/(Used in) Financing Activities |
754,212 | (60,298 | ) | |||||||
Net (Decrease)/Increase in Cash and Cash Equivalents |
(290 | ) | 5,877 | |||||||
Cash and Cash Equivalents at Beginning of the Period |
424,338 | 350,934 | ||||||||
Cash and Cash Equivalents at End of the Period |
$ | 424,048 | $ | 356,811 | ||||||
Supplemental Disclosures of Cash Flow Information: |
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Cash Paid/(Received) During the Period for: |
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Interest Expense |
$ | 94,378 | $ | 81,253 | ||||||
Income Taxes |
569 | (56,661 | ) | |||||||
During the Period the Company Purchased Various Securities which
Settled in the Subsequent Period |
178,076 | 23,359 | ||||||||
See Accompanying Notes to Consolidated Financial Statements
6
Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
(Dollars in thousands, except per share amounts)
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||